3 Reasons Advertising is Back in Context

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Peter has over a 15 years’ experience in AI and digital media and works with marketing directors from major corporate brands to build their online advertising strategies. With vast experience in AI, advertising technologies and strategic online planning, Peter leads the technology team at illuma, helping global brands maximize returns from their digital advertising investment through advanced contextual targeting.

Peter also speaks at major ad tech conferences around the world and has co-authored one of the first academic papers on programmatic advertising, entitled “An Empirical Study of Reserve Price Optimisation in Real-Time Bidding”.

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Contextual advertising has been around since the ‘00s. Though the advertising industry has in recent years largely focused on personal rather than page data, this piece explains three clear reasons why the tide is now turning, and contextual is more important than ever, writes, Peter Mason, CTO, illuma Technology Limited

Contextual advertising is old hat. We’ve known about it since the heady days of MySpace and Advertising.com. And of course, the rise of real-time bidding shifted heads towards personalized targeting instead. But especially in the past year, it seems those same heads are turning again.

Still, surely there were good reasons we left contextual back in the ‘00s, along with floppy disks and MySpace Tom? Against all the odds, targeting based on content instead of action is in the news again. Here are three reasons why:

1. Cookie Crumble

In one corner, we have ad blocking. In the next, tech giants clamping down on third-party data or intrusive formats (take a bow, Safari and Chrome.) There’s also a palpable sense of consumer disquiet around personal data and targeting. That reached a new low with Facebook’s handling of the Cambridge Analytica fallout. So much so, the very idea of targeting the individual may have become tainted - that is, at least according to one piece of research from Harvard Business School.

Still, you could argue - in time, all of these issues might just settle down. Which could well be true, were it not for our second point.

2. GDPR and Contextual-As-Opt-Out

GDPR is a curveball for people who maintain behavioural targeting is the only way forward. The new legislation means that like it or not, even they will need a fall-back option. Just as Google is offering a non-personalised, contextual option for those who opt out of tracking.

Hence also, we can see the reasoning for Oracle’s acquisition of Grapeshot. With a price tag of up to $400m, it’s a big vote in favour of contextual versus behavioural tactics. It may also anticipate a broader shift to contextual across the industry.

Such a switch may have short as well as long-term benefits. And it's not only about big acquisitions. See for instance Unruly announcing contextual packages for the first post-GDPR World Cup. Why not diversify? Especially if it’s true some advertisers are planning to cut spend altogether, at least until the dust settles.

3. Ad Tech Angst & the Nuclear Option

As an industry, we're at a point where we can go from valuing a company in the mid-nine figures, to a fire sale in just a few months. And all the bad news listed above certainly hasn’t helped our case.

Moving from one mini-crisis to the next, it’s easy to lose sight of the big picture: clearly, most of the challenges faced by the industry don’t ever seem to get solved. Are they really insurmountable? Or are they just structural - a constant reminder that more drastic change is needed?

Little wonder perhaps some have responded to growing ad tech angst by suggesting the nuclear option - In other words, "the whole programmatic ship is sinking - jump!" Some also put Blockchain forward as the solution to all of our ills, from ad fraud to rebates. The irony won’t be lost for those who remember when programmatic was presented in a similar light. And sadly, decentralized tech might be more problematic than some have let on - hard to maintain, even harder to scale. Especially at the speed of ad tech.
Is programmatic really a burning platform we need to abandon altogether? Or is it rather simply an ecosystem lacking diversity - that just needs to grow up and evolve?

It’s not so much that we need to make using data extinct. It’s more that we must cultivate different, and less personal species of data. Too much focus has gone into third party data, and retargeting – this, more than any other factor, may be why a growingbodyofresearch shows the majority of people find personalized targeting creepy.

What we need is not a return to a pre-cookie, horse-drawn internet. Or even one that pays in cryptocurrency. For one, there is far more you can do with the tactics first developed in the ‘00s than many realize. Content can be an even better way of targeting campaigns than personal data.